Is There A Case For Optimism In The Newspaper Business?

from the going-private dept

For obvious reasons, the stock market has not been kind to newspaper publishers of late. Their weak performance has prompted many companies to explore the idea of going private as a way of making painful changes to the business outside of the public eye. Last week’s announcement that billionaire Sam Zell would buy out the Tribune Co. was the first of what may be a number of similar moves. The natural question, then, is whether newspapers will actually perform any better as privately held entities, or whether the claim that public markets focus too much on short-term results is just an excuse. Either way, any plan to rescue the industry will have to involve a smarter internet strategy than what newspapers have shown so far. As one journalism professor from UNC puts it, newspapers need to realize that there’s no going back to the past. These companies will never enjoy the monopolies on information that they once held or the fat profits that came with those monopolies. That sounds really obvious, except that some publishers believe that a return the the past is possible. The alternative to turning back the clock is to embrace the future, which means plunging headfirst into the online realm. It’s very unlikely that the internet will prove to be a total substitute for much of the business that the newspapers are losing, but these companies really don’t have much choice. The good news is that most newspaper heads seem to be recognizing this, Sam Zell’s recent boneheaded statements about Google notwithstanding. A survey of publishers in Europe suggests that many recognize that the internet can complement the newspapers’ traditional business lines. By recognizing this, these publishers are making the deeper realization that they’re not in the newspaper business, but in the news business, which is where they need to be. For his own sake, hopefully Sam Zell will figure this out as well.

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Comments on “Is There A Case For Optimism In The Newspaper Business?”

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C.H. says:

How newspapers can survive

Too much of the modern newspaper industry depends upon the A.P., which is silly and short-sighted. If they want to increase their readership, not only do they need to embrace digital content delivery (and ways to monetize that delivery), but that content also needs to be targeted local content.

I recently cancelled my local news paper. I could get more regional news by listening to my NPR affiliate, and I could get national news from the internet. My paper gave me no compelling reasons to keep my subscription. In fact, they started to blur the separating advertising and editorial, which drove me away much quicker.

Casper says:

I am a bit bias..

I hate news papers. They give you the news later then every other source, they waist huge amounts of paper, they are deliberately inefficient to read, and most of the companies are so horribly managed that to sign up for or cancel service becomes an ordeal.

Right now there is a news paper being delivered to my house that I did not order. I called them and told them to stop sending it. They keep sending it. I have never paid a bill, I have never been called about it, it just keeps coming. I don’t bother to pick them up any more. They stack up for a week and I do one big load to the garbage can. I often feel compelled to wait out in my yard for the delivery boy and chase him off with a stick or maybe pitch rocks at him until he promises never to come back.

Tashi says:

I work for a newspaper (which shall remain nameless but it’s pretty damn large) and more and more resources are going toward the online platform. The good news is… in the case of my paper, they are very competitive online. They also recently partnered with another huge Internet company.

More good news… newspapers can focus on and target local demographics with print in a way that is still very advantageous to them.

Bad news… investors are willing to forgo long term gain for short term profits. This leads to gloom and doom predictions from Wall St. that are way overstated, because people want their money now, long term projections be damed. The funny thing is my paper has always been profitable. Hugely profitable. Sure some tough cuts and tough decisions were made, but they were always way in the black. But for shareholders, it was never profitable enough.

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